Russian ecommerce giant Ozon is considering a future IPO but being acquired by Amazon “would be cool”

Ozon, the Russian ecommerce company often compared to Amazon, is considering an IPO to fuel further growth as it pursues a goal of 80% market share in Russia within ten years, but wouldn’t rule out accepting an acquisition offer from a company like Amazon or Rakuten.

Ozon’s CEO, Maelle Gavet isn’t your typical tech boss. As we chat in the comfort of the bar at a hotel in London’s exclusive Mayfair area, she’s open and relaxed, with almost none of the buttoned-up ‘we’re not talking about anything but our PR line’ front that you’d usually get from a company that reported revenues of $492 million for 2012, a year-on-year growth of 67%.

We meet on the day that Rocket Internet’s Russian footwear retailer, Lamoda, announced a huge $130 million funding round. This is of interest to Gavet as Ozon acquired Lamoda’s biggest rival, Sapato, in early 2012. She says she’s not worried though, noting that Lamoda will be using the money to expand into countries like Kazakhstan and Ukraine. “It’s the right market to focus on, but we intend to go into those countries through Ozon.ru, not through Sapato.”

“The market is still at a stage where there’s a lot of space for a lot of people. A lot of (Lamoda’s funding round)… is to expand their delivery network and that’s going to take a lot of time. Obviously we’re always looking closely – but good for them. I would be way more worried if a foreign company said ‘We’re about to spend this much money to develop Russia’, that would be a bigger worry for us.”

“When you look at what (Amazon) have been able to do outside the US, they’ve been extremely successful in countries where they could pretty much do a copy-paste of what they’ve done in the US. When you look and China and Brazil, the picture is slightly less clear. They don’t publish their numbers by country but it doesn’t seem like it’s been that easy in these countries like it’s been in the West. The BRIC countries require a slightly different business model, and when it comes to China or to Russia it requires a very different business model because you need to take care of the business model.”

Indeed, the moat that Ozon has built for itself against foreign rivals, Gavet says, is its fulfilment and logistics network for delivering goods to customers, something that any big rival would have to begin from scratch. Ozon’s $100 million funding round in September 2011 helped the company grow this network in Russia, and having recently launched in Kazakhstan, further international expansion is on the cards.

Gavet says that things are “going well” in Kazakhstan, with the company planning to open an office in the country rather than operating remotely. Other countries on the roadmap include Ukraine, Latvia and Luthuania. We won’t see Ozon expand into Turkey like fellow Russian Internet giant Yandex. Gavet points out that it’s much easier for an all-digital company like Yandex to do this, whereas for an online retailer it’s a “completely differnt ballgame.”

Mulling an IPO in order to hit 80% Russian market share in ten years

Despite the company’s financial growth in 2012, Gavet won’t comment on whether or not Ozon is profitable yet. Still, what is the end-game here? Is an IPO on the cards?

“We’re thinking about it. We don’t consider an IPO a target in itself. Our target is that in ten years time whenever you do online shopping in Russia, 80% of people will do shopping through an Ozon type of shopping. What I mean by that is that either you will go to one of our B2C website like Ozon.ru, Ozon Travel or Sapato, or you would go to a website that would be powered by the Ozon group.

“We have two B2B businesses – O-Kuryer and eSolutions, which we created in February. And basically the idea is that these B2B businesses, they’re going to help smaller online retailers to get themselves up.”

Gavet says that the company board is trying to figure out how much money is needed to achieve that lofty goal of 80% market share, “but an IPO just for the sake of (an) IPO doesn’t really make a lot of sense.”

It’s worth noting that Gavet’s comments are the opposite of what she told TechCrunch nine months ago, when she said it was “too early” for an IPO. Judging by her latest comments, the agenda has shifted a little since then.

The other option, of course, would be for someone to come along and acquire Ozon. Would Gavet be interested in being acquired by Amazon? “It would be cool,” she says, with a laugh. However, she makes clear the agenda right now is not to sell the company, it’s to grow it.

She mentions how since the 2011 funding round she’s assessed plenty of possible companies that Ozon may have wanted to acquire. “You could tell which companies were built to be sold and which needed money to grow. You don’t want to buy a company that was built to be sold. It’s just not the right company. It reinforces for us that we really wanted to be a company that’s focused on growth, rather than ‘when can we finally be bought out?'”

Still, Gavet acknowledges that to reach that 80% market share goal, an IPO or being acquired are “Pretty much the two options – we’ll see what comes along.”

While an acquistion by Amazon may be ‘cool’, Gavet is full of praise for the approach by another major name in ecommerce – Japan’s Rakuten, a company that has been gradually making acquisitions and investments in markets around the world. Indeed, it was a minor investor in Ozon’s 2011 funding round.

“We’ve learned a lot about the way (Rakuten) built their merchant platform, the way they manage their merchants. They have an incredible model. I don’t understand why the Western press doesn’t talk about them more because in ecommerce you basically have the Amazon model, you have the eBay model, which is migrating more and more towards the Amazon type of thing and then you have Rakuten and that is really an alternative to the way Amazon works.”

Achieving an 80% share is a tall order for anyone in any market, but as I leave Gavet to her lunch I have the impression that she has the savvy to get there by hook or by crook, IPO or acquisition.